news HOWARD — Working every angle he could, auctioneer Chuck Sutton couldn't move Maroney Commons Friday.
He spoke about how the restaurant's kitchen was valued at $200,000, stressed the high craftsmanship of the building and its technological advances. He explained the facility has the only elevator...
Mitchell, 57301

He spoke about how the restaurant's kitchen was valued at $200,000, stressed the high craftsmanship of the building and its technological advances. He explained the facility has the only elevator in Miner County. He even went as far as saying the building's mechanical room was "a Taj Mahal."

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Despite Sutton's sales pitches, Howard's $6.5 million Maroney Commons did not sell Friday at a public auction that was hosted inside the building.

"An auction is a beautiful method and it works 99.9 percent of the time, but you have to have multiple people that want something," Sutton said.

It drew one bid of $125,000, or about 2 percent of the $6.5 million cost that it took to construct the building, which opened in 2011. The bid -- from a group of investors in Madison -- was not enough to meet the $500,000 price the U.S. Department of Agriculture determined it needs to get from the building's sale. A USDA program was a major funding source of the building's construction.

Sutton said the reason the Maroney Commons was unable to sell Friday is because of its rural location. Sutton, who said he sent more than 6,000 mailings to potential buyers regarding the sale, said if the building was in Sioux Falls, it would probably bring $2.5 million to $3 million.

"We all know that real estate is about the three 'Ls' and it's location, location and location," said Sutton, who is based in Flandreau and has offices in Sioux Falls. "Just like I told someone else, if this was in Dell Rapids, I would have bought that thing in a heartbeat. But it's the population base and the location."

More than 100 people were inside the building in downtown Howard during the auction. Most of them were curious onlookers who wanted to know what would happen to the building that has sat vacant since September 2012.

The auction took breaks, and some in the audience worked their phones to contact other prospective buyers, ones who might have been interested by a lower-than-first thought purchase price.

But nothing came together. Sutton told The Daily Republic after the auction that the prospective buyers worked closer to the $500,000 price. He's not sure what will happen now that the auction was a failure.

"We've got it listed for a period of time," Sutton said. "I think we've already gotten some interest based on increased offers from the auction, but we're not anywhere close to $500,000. We've narrowed the gap and we'll see from the fallout of this thing if we'll generate any additional offers, or if we can narrow the gap with our bidder. We'll see if we can negotiate it."

Sutton said if nothing happens with the listing, it will go into the hands of the USDA, which will have to decide the building's fate. Sutton said Friday afternoon after the auction that a group of Howard residents has shown interest in putting together a group to own the facility.

Maroney Commons has a 24-room hotel, restaurant and fitness center, with classrooms intended to be used for community and workforce development training programs, and conference space. It was built by a now non-existent organization known as the Rural Learning Center, whose leaders anticipated the facility would host industry training programs and other events.

The facility was largely funded through loans, including a $3.2 million loan awarded by the federal government's USDA Rural Development Program. Up to 90 percent of that money, which is actually loaned by Miner County Bank, is guaranteed by the federal government.

Other funding sources, such as the Heartland Consumers Power District and the Northeast South Dakota Economic Corporation, will receive $75,000 from the eventual buyer, which will be the depreciated cost of all of the building's furnishings, ranging from the restaurant's' point of sale systems to the towels in the hotel rooms to the chairs and tables in the conference center facility.

Some of the community members shook their heads at both how nice the building is and just how much of an uphill climb the prospective buyer would have with items such as taxes and utilities. The 2013 taxes on the property totaled $23,496.62, according to the sale listing, which would be paid by the seller this year.

"It's going to be hard to pay to heat this thing," said Don Threadgold, of Artesian, who was interested to see what would happen at the sale. "It sure is a nice facility."